Capital tycoons Warren Buffett and Soros are already household names. But there is a big guy who manages fund returns far higher than Soros and Buffett, known as the "king of quantitative investment", only because the trading strategy is too "cold" and little known. He is James James Harris Simons, the 44th richest man on the Forbes list.

Grand Medal Fund (Medallion Fund) founded by James SimmonsAfter deducting management fees, the average annual income is still as high as39%(up to 66% before deduction).By contrast, Soros's quantum fund ranks second in annual returns of 32%; even higher than Buffett's Berkshire's average annual return of 21%.

Academic dilemma of making money

Unlike Buffett and Soros, who joined the financial markets early, Simmons was a professor of mathematics before starting his own fund. In 1955, at the age of 17, Simmons was admitted to the Department of Mathematics at the Massachusetts Institute of Technology and completed his undergraduate degree in three years. After graduating from the undergraduate course, he againOnly usethreeHe received a doctorate in mathematics from the University of California, Berkeley.After graduation, he taught at MIT and Harvard.Mathematical research was once his lifelong ideal.

The fork in life begins here. During the teaching period, he and two classmates joined hands to open a factory, but it was not smooth again and again. In order to pay his debts, he had to change jobs and leave his academic favorite place. Soon after, however, he was fired because he had different political views from his boss. At this time, he was a father of three, and in order to make a living, he had to work as head of the mathematics department at the State University of New York at Stony Brook, which was only ten years old. Although he could not teach in a prestigious school, he reached his academic peak during this period:He and Shiing-Shen Chern jointly put forward the Chen's-Simmons theorem, and in1976Won the highest honorary award in geometry in 2000.

It is worth noting that during his tenure as head of the mathematics department, he poached people from famous universities in various countries and pushed the university's mathematics department to the top position in the United States.It can be seen from this time that we attach importance to team building and the ability to identify talents.

The "accident" appeared again, and the factory he had opened before began to make a profit. He gave the US $600000 from the sale of his shares to the students to invest, which unexpectedly turned into 6 million.Simmons, who encountered a bottleneck after his academic achievement, was obviously attracted by the investment.

The forerunner of quantitative investment revolution to build a first-class quantitative team

He has just started to set up a Limroy fund to try to trade in the foreign exchange market. This fund is still like other funds at first, mostly using fundamentals as a judgment to make bets.Although the performance is OK, Simmons feels a lot of pressure on this kind of investment method.

In March 1988, the Grand Medal Fund was officially established. What makes this fund unique is thatCompletely use the strategy of quantitative investment, regardless of fundamentals, value investment and other factors.Based on his genius in mathematics, he developed quantitative analysis models, processed a large number of screened data, predicted short-term market fluctuations with the help of statistical principles, and conducted thousands of short-term transactions every day.

Simmons can be said to be the forerunner of the quantitative investment revolution. According to Tabb Group's data,Now in the market,31%All stocks are quantified.Stocks that rely solely on fundamentals to buy and sell currently account for only 15 per cent of the market, according to JPMorgan Chase & Co.

For quantitative investment, data mining is a very critical step. Simmons' team through the instruction book data and order stream dataLarge-scale data mining has found many successful trading strategies.And complete the cross-validation In addition, lessons are drawn from the failure of the Solomon Brothers LTCM Fund in the financial crisis due to excessive use of high leverage.The Grand Medal Fund uses relatively few derivatives and attaches great importance to the liquidity of trading assets.

Compared with other hedge funds, they still partly adopt fundamental strategies and employ talents of MBA nature.Simmons' team is almost all scientists with professional backgrounds in mathematics, physics, and statistics.. Simmons formed a team of scientists to help the school's math department rank, but now he has formed a team to sweep the capital markets.